This application generally relates to data processing and, more particularly, to verifying and to pre-approving account transactions.
Credit and charge card fraud is a problem. The United States Federal Trade Commission estimates that credit/charge card fraud costs consumers and businesses hundreds of millions of dollars each year. See, e.g., FEDERAL TRADE COMMISSION, AVOIDING CREDIT AND CHARGE CARD FRAUD (1997). As online shopping grows in popularity, Internet merchants are bracing for increased fraudulent transactions. Because online transactions do not require a signature or a physical card, payment fraud is a continual concern for e-commerce merchants. The Nilson Report (a trade publication for consumer payment systems), for example, estimates that credit card fraud accounts for eighteen to twenty four cents ($0.18-$0.24) of every $100 of online sales.
Because fraud is a problem, merchants and financial institutions are striving to reduce fraud. Some merchants adopted elaborate procedures for completing a sale, such as matching a shipping address to a billing address, verifying that a card has not been reported lost or stolen, or checking for unusual activity on the card. Some credit card companies are even developing elaborate authentication services to fight fraudulent activity. Despite these efforts, however, more improvements are needed. What is needed, then, are methods, systems, and products that verify account transactions to reduce fraudulent activity.